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The MHL Hat Trick: Premium Brands, Convenience and Great Flavors

December 21, 2018

This company’s white-hot “flavor” offerings check all consumer boxes, and then some.

According to Mike’s Hard Lemonade (MHL) CEO Anthony von Mandl, consumers are demanding three distinct things from their alcoholic beverages, and they’re telling us so with their wallets. Von Mandl says those things are, “A premium product, convenience and better-quality brands in a variety of flavors.” But, because 77% of beer shelves are stocked with lagers and IPAs, consumers can’t easily find what they’re looking for. Von Mandl’s Marketing VP, Sanjiv Gajiwala agrees, “Beer may be convenient, and some brands may be premium, but not all brands check all three boxes.”

That’s why the flavor category is king – it’s all about premium. “In fact,” continues Gajiwala, “in the super high-end [category] of beer, flavor makes up two-thirds of the dollar sales, and Mike’s Hard Lemonade Co. is the fastest growing company in that segment.”

So, what is the flavor segment exactly? Well it happens to be home to some of the most innovative brands in recent years (as well as some of the most profitable). Flavored Malt Beverages (FMBs), ciders, seltzers and flavored craft beers, like juicy or hazy IPAs, all fall into the flavor segment. Believe it or not, 12 of the top 15 new brands in 2018 came from the flavor segment. “Flavor is now the same size as craft!” says Gajiwala.

The difference, however, is that with all the craft beer options out there, often times shelf sets overwhelm consumers. With the flavor segment, you can stock fewer SKUs and still get some major bang for your buck. “Only 85 flavor SKUs make up 80% of flavor’s volume, compare that to 850 SKUs that make up 80% of craft’s volume. So, having the right assortment is critical to your growth. And consumers care about brands in this category, they want the ones they trust.”

That’s where Mike’s second-to-none portfolio comes in. “Mike’s has the brands and products that meet all of [consumers’] needs – which is why we’ve been a bright spot in the industry. MHL doubled sales the last five years, bringing flavor to life in the beer category.” The proof is in the numbers: Mike’s is the #1 FMB in the food channel, White Claw is the #1 hard seltzer brand in volume, dollars and velocity, and their high-octane Mike’s HARDER lineup has exploded, leading all other FMBs in the single-serve category. “Our convenient, ready-to-drink, flavored products are exactly what consumers are looking for,” says Gajiwala.

The consumer trusts Mike’s lineup of products largely because MHL Co. cares about what they put in the bottle. “We’ve invested millions of dollars in making the cleanest tasting, neutral malt base possible. And we only use natural flavors in everything we make. In fact, each six-pack of Mike’s Hard Lemonade has the equivalent of the juice of two lemons! You’ll see and taste the difference in all of the products we make!”

A few years ago, von Mandl and his team decided to bring Mike’s hat trick of premium products, quality flavors and convenience to their seltzer brand White Claw, and they have effectively won the Stanley Cup.

Now the #1 hard seltzer brand in all IRI channels, White Claw is proving that FMB and seltzer consumers are a distinct group. “Only 7.8% of FMB consumers shifted to seltzers, so we’re actually not seeing the type of cannibalization that some retailers were concerned about.” They’re also seeing huge success by simplifying their flavor offerings. “We see double, sometimes triple the average weekly units sold of simple flavors like Mango or Raspberry, as opposed to seltzers that have more complex flavor names.”

White Claw is also cleaning up in on-premise accounts. “Activation is simple, it’s not about mixology or fancy cocktails – it’s all about the can – an elegant, perfect serve over the bar,” says Gajiwala. White Claw also does well in craft beer accounts where you don’t typically find traditional light lagers, “which is why we think the 16 oz. can, the hottest package in craft, works perfectly!”

White Claw is set to release their newest innovation this April, White Claw Pure. “Vodka and soda is the #1 preferred mixed drink in America, and nothing in the beer category meets or matches this unique, ‘unflavored’ flavor – until now.” White Claw Pure is a smoother, simpler seltzer and is geared specifically to satisfy the vodka soda drinkers, who are encouraged to “add their own twist”. And because of the MHL proprietary BrewPure process, Gajiwala says, “No one else can make a pure seltzer that tastes as clean and refreshing as ours. You can taste the difference.”

With their big three brands, Mike’s Hard, White Claw and Mike’s HARDER driving the fastest growth in the flavor segment, as well as Cayman Jack and the MXD Cocktail Co. reporting huge growth in velocity, this premium portfolio is sure to continue its meteoric growth in 2019.